The T5018 is an annual information return that is used by the Canada Revenue Agency (CRA) to stop or mitigate underground economic activities within the construction industry in Canada.
Who Files a T5018 Slip?
The T5018 information return is to be filed by any corporation, partnership, trust or individual, that has construction as its source of primary business income. If your business generates more than 50% of its business income through construction activities, then you are required to file a T5018 information return.
Additionally, in a year, if you have made payments for construction services above $500 to subcontractors (or received credits from them), then you are also mandated to fill the T5018 slip.
Process for Filing an Information Return Slip
Residency status determines the specific information slip that’s to be completed.
Subcontractors who are residents of Canada are required to report contract payments on a Contract Payment Information Return. This information return consists of a T5018 slip and summary, and it covers construction services executed within and outside of Canada.
Subcontractors who are not Canadian residents are to complete the T4A-NR information return, which includes a T4A-NR summary and slip.
Regardless ofthe information slip you are to file, it can be done either by yourself or your accountant on the CRA website. It can be done via the My Business Account portal or Represent a Client portal respectively.You can file as many slips as needed via these portals on the CRA site.
When Are You to File the T5018 Return Information?
You can file the T5018 on a fiscal-year basis, or calendar-year basis. Regardless of the reporting cycle you choose, the return is due six months post the reporting period.
If you want to make changes to your current reporting period, you will need approval from the CRA.
Should your business stop operating, you are required to file the information return within 30 days post-closure of the business.
What Are the Penalties for Not Filing Your T5018 Return Information?
There are strict penalties for late submission or failure to submit your return information after the expiration of the reporting period.
Each slip is counted as separate information return, and the CRA will penalize you based on the number of slips submitted late - or not submitted at all. The number of late days is used to calculate the penalty fee.
Interest will continue to accrue on the penalty sum until it is paid in full.
Additionally, any contractor that cooperate with a subcontractor to conceal financials, to avoid taxes, could face criminal charges. They could also be penalized with fines up to 200% of the taxes they tried to evade.
Conclusion
The T5018 is the primary means the Canada Revenue Agency (CRA) uses to track financial activity between employers and subcontractors to ensure that all earnings and taxes are paid correctly and on time.
If you need help with filing T5018 forms, feel free to contact us at 778.801.5789 or email to jluk@bloomaccounting.ca
If you are a business in BC, you may have received a notice to register for the Employer Health Tax by May 15, 2019.
First off this only applies to businesses with $500K gross annual payroll or more in the last calendar year.
If you run multiple businesses, note that the $500K threshold is shared amongst associated businesses.
How to Register?
To Register: Visit the Etax BC log in page (same page you would log in to file PST) and you will find a link to register for Employer Health Tax.
How Much is the Tax?
For every $1 above $500K, expect to pay 2.925% up to payroll of $1.5mil.
For every $1 above $1.5M, expect to pay 1.95%
Much like corporate tax, installments are required to be made if EHT is more than $2925.
In other words, if you have more than $600K in gross annual payroll, you will need to make quarterly installments.
Knowify gives contractors construction software to handle job costing, contracts, estimates, job management, service tickets, time tracking, scheduling, invoicing, and billing. Knowify can help any commercial or residential contractor manage and grow their business. PLUS! It integrates with QuickBooks Online.
We recently put two cloud based contractor software to the test; Knowify vs. Co Construct.
How did both score?
What were the strengths and weaknesses?
Ready?
Lets Begin.....
Our Rating:
We scored Knowify at 8 / 10 and Co Construct 7 / 10 Based on the following factors
Proposals
Knowify definitely scored higher on the this feature. Proposals can be generated and sent out for E-signatures in Knowify vs. Proposals are generated in Co-Construct and exported to a word document. The ability to create, send and track proposals within one platform streamlines the contract process and ensures that all contracts are signed and found in one spot.
Invoicing
Knowify again scored higher with the ability to invoice within the software. Co construct does not have this feature at all.
We found it imperative for our clients to know total committed contract values, billed portion and unbilled portions in the pipeline in real time, and Knowify does the job. Both the invoices and payments are synced between Knowify and Quickbooks vs. Co Contract, no invoice, however payments are synced with Quickbooks.
Budgeting
Co-Construct won this feature over Knowify. We found it helpful to template job budgets and able to expand on each phase of a job and budget for both materials, multiple subcontractors, freight, and misc. supplies.
Change Orders
Both software creates change orders and sends out to client for electronic approval. Nice!
Again, Co-construct does not have an invoicing feature, so it would be imperative to ensure your Accounting team invoices the change order after its been approved. Where as Knowify will track the approved invoice as an unbilled portion of the change order.
However if your change order is an addition of an entire scope which requires additional budgeting, Co-Construct would be the software we recommend as Co-constructs's budgeting feature is more detailed and flexible compared to Knowify.
Job Costing
With Co-Construct, scopes can be templated and cost accounts assigned to each product / item.
With Knowify, same costing can be templated and is done through the Plan & Track module, however, lacks the ability to assign multiple sub contractors to each phase and for that reason Co-Construct wins slightly here.
Congrats! You are ready to onboard your first Employee!
Step 1: Obtain a CRA Payroll Number.
You can do this by simply giving CRA Business a call and a rep will issue a payroll number immediately.
The account number will be your business number followed by RP0001.
Step 2: Select Your Payroll Service Provider
There are ample payroll service providers available, such as Ceridian, Payworks, ADP to name a few.
Each of these providers offer an online platform to process your payroll, track vacation accruals, manage employee details, facilitate direct deposit, and issues ROE's upon termination.... for a fee. Fee structures varies between providers so read the fine lines! Late payroll or extra runs can cost up to $150. OUCH.
Another option is Quickbooks Online Payroll. If you are using a bookkeeper or DIY, you can add on the payroll module for ~$20 per month. QBO also facilitates direct deposit, however does not file your PD7A remittances for you. Your bookkeeper or yourself will need to do this monthly.
If you are wanting the FULL Service options which includes filing and remitting the monthly remittance to CRA, Quickbooks now offers Payroll Advance which costs ~$40 / month.
Regardless of which service provider you choose, its important to have someone knowledgeableto process your payroll as he / she will need to still calculate the statutory holiday pay if eligible, vacation pay, bonuses, commissions etc.
Step 3: Sign Employment Agreement & TD1 CRA forms
After extensive interviews and arriving at your employee of choice, it is customary to lay out the terms of the employment on paper and have both parties sign an employee agreement along with TD1 CRA Federal & Provincial forms.
Step 4: Process Payroll
Log in to the service provider chosen, process the payroll, cut check or process by direct deposit.
If you are using one of the full service providers, you will not need to issue pay stubs as your employee can log in to the self serve portal and access. If paying by check(s), pay stub(s) are printed and attached to the check(s).
Things to Remember
Payroll Remittances are generally paid monthly, by the 15th of the following month.
T4 are issued by Feb 28th of the following year. T4 Summary must be filed by Feb 28th of the following year.
Worksafe reports are filed either quarterly or annual depending on your business.
ROE's must be issued upon termination of an employee and filed with Service Canada.
Vacation & severance if any, must be paid out upon termination.
Not sure if employee qualifies for stat pay? See POST: http://bloomaccounting.ca/blog/view/274
There is, in-general, a lot of thinking involved when people or businesses need to adopt to a work module which is considered more effective than the ones they are comfortable using. But a mechanism that eases work pressures and assures for greater accuracy is always a smart option to switch to. The inception of cloud accounting has revolutionized the accounting industry and has helped businesses operate much smoothly and more efficiently in Real Time and Less Time.
What is Cloud Accounting?
Cloud accounting is pretty much an ONLINE accounting system. Like many online software, the software has security measures and requires user log in authentication. The two major providers are Quick Books Online and Xero, both allowing for bank connections and automated bank feeds, online payment solutions, electronic invoicing and much more. Cloud accounting solutions are partnered with the use of phone apps and are scalable to track multiple users and multiple business locations.
Partner Apps Categories
The potential to customize an accounting software to a specific industry is quite robust with the use of a Cloud Accounting Software. Both QuickBooks Online and Xero have partnered with other CRM, Construction Project Management, Time Tracking, and many more Software Tools that can integrated to its central accounting software. Below are categories of apps which can be integrated:
Commission Management
Contact Management
CRM
Data Security/Backup
Data Sync
Document Management
eCommerce
Estimating and Bidding
Expense Management
Field Service Management
Human Resources
Inventory Management
Manufacturing
Marketing
Payment Processing
Payroll
Point of Sale Solution
Project Management
Reporting
Shipping
Tax Tool
Time Tracking
CRM
Some of Our Favorite Apps & Partners
SmartVault
Smartvault is an online document management system which integrates with QuickBooks online. It allows for the organization and filing of virtual documents and helps businesses adopt a paperless system. Each Vault is secured and can be designed to allow for access by only specified individuals within an organization. Project and retail managers are then able to locate past vendor invoices in a few clicks without inquiring with the accounting department and without digging through paper file folders. Software comes with a phone app allowing for documents to be loaded with a snap of a photo.
HubDoc
Hubdoc also serves as an online document management with added abilities to retrieve and centralize all online statements including banking, check images, and vendor bills automatically every month. Hubdoc also reads documents and can push accounting entries through to the cloud accounting software while attaching a copy of the document for source reference.
ADP
ADP is a cloud based, user friendly payroll platform with many added features to grow an organization's human resources department including an online employee self-service portal to retrieve pay stubs, and T4s.
Knowify
Knowify is an online CRM, Job Planning, and Invoicing software which integrates with Quickbooks Online specifically designed for the construction industry. With Knowify’s estimating tool, you can plan jobs, itemize material budgets, and schedule staff to create comprehensive cost estimates. These estimates can be translated into bid line items with a single click, create bids and contracts business letterhead and send them through Knowify for electronic signature. System also is able to create service tickets and schedule technicians on work orders.
MindBody Online
MBO's cloud POS and CRM software is tailored to businesses with recurring membership broken down into time series and class count packages. A good match for yoga, dance, and fitness studios. It has the capacity to track customers purchases, inventory, classes, visits and much more. For a full review of MBO, please refer to our blog post here:
At Bloom, we are always on the look out for the latest accounting apps and software to help streamline an accounting department workflow while still maintaining the internal controls necessary to run your business.
If you have any suggestions, we'd love to hear about it.
